Albania taxes resident entities on their worldwide income and non-residents on income generated in Albania. The main laws are Law No. 29/2023 “On Income Tax” (in force from 1 January 2024), Law No. 92/2014 “On Value Added Tax”, the law on tax procedures, the law on local taxation and the law on national taxes.
From our guide “Doing Business and Investing in Albania”, 2024 edition. Rates and rules change, and the Fiscal Package 2026 brought further changes. Use this page as an overview and talk to us before acting on it.
Corporate income tax
From 1 January 2024 all entities are subject to corporate income tax regardless of turnover, at a standard rate of 15%. Entities registered with the National Business Center, or effectively managed from Albania, are Albanian tax residents. Double tax treaties prevail over local law, and related-party transactions follow the arm’s length principle, in line with the OECD Transfer Pricing Guidelines.
- Tax losses can be carried forward for five consecutive years, unless ownership changes by more than 50%
- Prepayments are made monthly by the 15th, or quarterly
- The annual return is filed electronically by 31 March of the following year, with any balance due paid by the same date
Personal income tax
Individuals are resident if their centre of vital interests is in Albania or they are present for more than 183 days in any 12 months. Residents are taxed on worldwide income, non-residents on Albanian income. Tax on employment income is withheld monthly by the employer.
| Employment income (ALL a month) | Tax, 1 June 2023 to 31 December 2024 |
|---|---|
| 0 – 50,000 | 0% |
| 50,001 – 60,000 | 13% of the amount above ALL 35,000 |
| 60,001 – 200,000 | 13% of the amount above ALL 30,000 |
| Over 200,000 | ALL 22,100 + 23% of the amount above ALL 200,000 |
| Employment income (ALL a year) | Tax from 1 January 2025, as set out in the guide |
|---|---|
| Up to 2,040,000 | 13% |
| Over 2,040,000 | 23% |
Business income of individuals is taxed at 15% up to ALL 14 million of taxable income and 23% above. Investment income is taxed at 8% on dividends and 15% on other investment income. Individuals with gross annual income above ALL 1.2 million, more than one employer in the year, or untaxed income above ALL 50,000 file an annual return by 31 March.
Withholding tax
| Payment | Rate | Paid to a non-resident? |
|---|---|---|
| Dividends | 8% | Yes |
| Interest | 15% | Yes |
| Royalties | 15% | Yes |
| Rents | 15% | No (residents: payments to individuals) |
| Services and other income | 15% | Yes |
Dividends paid to an Albanian company are exempt where it holds at least 10% of the payer for an uninterrupted 24 months. Albania has signed 43 double tax treaties, 41 of them in force; to apply a reduced treaty rate, the parties apply to both tax authorities, within two years of payment of each invoice.
VAT
The standard VAT rate is 20%. A reduced rate of 6% applies to accommodation services, services of five-star hotels and resorts with special status, certified agritourism, advertising by audiovisual media, books and electric public-transport vehicles with more than nine seats; agricultural inputs are taxed at 10%. Exports and international transport are zero-rated.
- Registration is required above ALL 10 million of turnover in a calendar year (voluntary registration is possible)
- The VAT return is filed and paid by the 14th of the following month
- Excess credit can be refunded after three successive months of carry-forward, where it exceeds ALL 400,000
- Non-residents supplying services to non-taxable persons in Albania appoint a VAT representative
Social and health contributions
| Contribution | Employer | Employee | Self-employed |
|---|---|---|---|
| Social | 15.0% | 9.5% | 23.0% |
| Health | 1.7% | 1.7% | 3.4% |
| Total | 16.7% | 11.2% | 26.4% |
Social contributions for employees are calculated on monthly salaries between ALL 40,000 and ALL 176,416; health contributions have no upper limit. Foreign employees on a local contract contribute like local employees.
Transfer pricing
Albanian taxpayers with cross-border transactions with related parties (a 50% ownership or voting test) are subject to transfer pricing rules based on the OECD Guidelines. Taxpayers whose controlled transactions exceed ALL 50 million a year file an Annual Controlled Transactions Notice.
What is the corporate income tax rate in Albania?
The standard rate is 15%, and from 1 January 2024 all entities are subject to corporate income tax regardless of turnover.
What is the VAT rate in Albania?
The standard rate is 20%, with a reduced 6% rate for certain accommodation, advertising, book and transport supplies, 10% for agricultural inputs, and 0% on exports.
What is the withholding tax on dividends?
8%. Dividends paid to an Albanian company holding at least 10% for 24 months are exempt, and a double tax treaty may reduce the rate for non-residents.
Need tax advice?
Our tax team covers corporate tax, VAT, transfer pricing and global mobility, for local companies and multinational groups.
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